HAVANA – The event at a convention center in the Cuban capital resembles many trade fairs: music blares as visitors stroll between colorful stalls showcasing a wide variety of products: furniture or clothing, glassware or recycled paper , chocolates or cleaning products.
But it’s a business milestone for Cuba: the companies showcasing their products are largely formal private companies that were legalized only about six months ago – more than half a century after the communist government prohibits almost all private companies.
“We are experiencing something unprecedented, at least for our generation,” said César Santos, a 36-year-old engineer, partner of Lucendi SRL, a company that offers electrical installations to private and public customers. “We’re seeing other businesses that we didn’t even know existed.”
Santos was born 18 years after the government closed or took over private businesses in 1968, cementing a Soviet-style socialist system that had been forged after the 1959 revolution led by Fidel Castro.
Cuba’s one-party political system survived the collapse of the Soviet Union in 1991, but its socialist economy continually struggled to find its footing in the decades following the loss of large Soviet subsidies. It has long tried to attract foreign investors and has developed tourism, despite US embargo measures that hamper both. But public sector productivity remained dismal.
Fidel Castro’s government reluctantly began allowing small individual private businesses in the early 1990s, then cracked down amid complaints they were creating a relatively wealthy class of people in a system that prioritizes equality over wealth .
With an inefficient economy still struggling, the government led by his brother and heir Raul opened the door to sole proprietorships again in 2010. On the eve of the pandemic, some 600,000 people worked in this sector on the island of 11 .3 million inhabitants.
They run small restaurants, rent rooms, offer repair services, even at least a boutique of fancy clothes – although they can supposedly only employ family members or a handful of strangers.
But the new policy that took effect in September – as the economy was hit by shortages, pandemic restrictions and a heightened US embargo – potentially goes far beyond that: it allows real businesses that can employ up to 100 people, to obtain formal financing and to do business with state enterprises.
In six months, 2,614 new “limited liability companies” – or SRLs in Spanish – registered. And 2,523 of them are private companies, the rest being public or cooperative companies. Most are in the Havana area.
So far, they employ about 42,000 people.
However, restrictions remain. The government says the state will remain the dominant force in the economy and new businesses cannot do journalism or offer key professional services such as architecture, medicine or law.
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And businessmen at the fair said they still face bureaucratic hurdles that need to be ironed out if the system is to work better: for example, banking, import and export paperwork is complicated. , they said.
On the closing Sunday of the fair at the Expocuba center on the southern outskirts of Havana, 720 companies and cooperatives present everything from yogurt to building materials.
Officials hoped the gathering would in part help entrepreneurs build business contacts with each other, said Suleidis Álvarez, an official with the capital’s Plaza of the Revolution municipality. For example, she says, a carpentry company had found a producer of the nails it needed.
The youthfulness of the participants was remarkable on an island that has suffered the loss of many young people to emigration.
“The migration crisis we are currently experiencing is really sad,” Santos said. “Nevertheless, we see opportunities arising through this private (political) enterprise. … I prefer to bet on building my business in the country where I am.